[With Resolution of Aug. 23, 1966]

Industrial-Commercial-Agricultural Workers' Organization versus Central Azucarera de Pilar

The Case

This is a labor case that began as a charge for unfair labor practice filed by the Industrial-Commercial-Agricultural Workers' Organization, which I shall call the union, against Central Azucarera de Pilar, a sugar milling company, and its allied workers association. The union complained that the company refused to take back one hundred one seasonal workers who had joined a strike, invoking a closed shop clause in its collective bargaining contract with another union. The case matters because it fixes the status of seasonal workers in Philippine labor law: they are not new workers, and their employment relationship is suspended, not severed, during the off season. It also teaches the proper reading of a closed shop clause and the discretion of the industrial court in awarding backpay.

Procedural History

The union filed its unfair labor practice charge with the Court of Industrial Relations in May 1958. The Court of Industrial Relations, in a decision dated 27 November 1961, ordered the reinstatement of the laborers with back wages. On a motion for reconsideration, the court in banc reversed that decision in its resolution dated 13 August 1962. Not satisfied with the reversal, the union filed a petition for certiorari to review the industrial court's resolution. The Supreme Court decided the case on 31 March 1966, setting aside the resolution under review and remanding the records. The company and its manager then filed a motion for reconsideration, which the Supreme Court denied in its resolution of 23 August 1966.

Facts

On 9 February 1956, the union declared a strike against Central Azucarera de Pilar. The strike was amicably settled the following day. Among the provisions of the amicable settlement was the company's undertaking not to discriminate against any worker, and that the same treatment shall be accorded to workers who declared a strike or not. The settlement also recorded that the union would file a petition for certification election in view of the other labor union, the Central Azucarera de Pilar Allied Workers Association, with whom the company had an existing collective bargaining contract, and which the union considered a company union.

The collective bargaining contract entered into in 1955 contained a closed shop arrangement. The employer agreed that in hiring unskilled employees and laborers, members of the workers association should be given preference, and that new employees and laborers hired who are members of the workers association would be on temporary status, and before being considered regular they had to become members of the association within thirty days from the date of employment, failing which they would be immediately dismissed.

Among the strikers were one hundred one seasonal workers, some of whom had worked as such for the company since pre-war years. When the milling season for 1956 to 1957 opened, the company refused to re-admit these seasonal workers on the ground that it was precluded by the closed shop clause in its contract with the allied workers association. The union then filed the unfair labor practice charge. The company relied on the Hind Sugar Company case, while the union's cause found support in the Manila Hotel Company case, where the Court had spoken of regular seasonal employees whose relationship with the employer is never severed but only suspended.

Issues

• Whether or not the one hundred one seasonal workers were new workers within the scope of the closed shop contract between the sugar central and the allied workers association.
• Whether or not the discharge of these seasonal workers was illegal.
• Whether or not the union incurred laches in filing the unfair labor practice complaint on 8 May 1958.
• Whether or not the seasonal workers are entitled to backpay, and who should determine the amount.

Applicable Provisions

Section 5, paragraph c, of the Industrial Peace Act, Republic Act Number 875, provides:

Where a person is found engaging in any unfair labor practice, the Industrial Court, besides issuing the cease and desist order, must take such affirmative action as will effectuate the policies of this Act.

This provision bears on the case because it is the source of the industrial court's power to order reinstatement and to award backpay, and it implies the exercise of judgment and discretion based on the facts.

Ruling

On the first issue, the Court held that the seasonal workers were not new workers within the scope of the closed shop contract, and hence their discharge was illegal. The Court relied on the Manila Hotel Company case, which described the status of regular seasonal employees in this way:

Their status is that of regular seasonal employees who are called to work from time to time, mostly during summer season. The nature of their relationship with the hotel is such that during off season they are temporarily laid off but during summer season they are re-employed, or when their services may be needed. They are not strictly speaking separated from the service but are merely considered as on leave of absence without pay until they are re-employed. Their employment relationship is never severed but only suspended. As such, these employees can be considered as in the regular employment of the hotel.

The Court explained that the Hind Sugar Company case did not actually rule on the temporary character of the employment of seasonal workers; it merely affirmed their reinstatement as a solution to a strike, without regard to the permanent or seasonal nature of the employment. The Hind case did not deal with seasonal employees recalled to work year after year, thereby creating a reasonable expectation of continued employment.

On the second issue, the Court held that the discharge was illegal because the workers were not new workers under the closed shop clause. In its resolution denying reconsideration, the Court added that the cessation of milling at the end of the season is not permanent or definitive but a foreseeable suspension of work, and that the temporary layoff does not sever the employment relationship, especially where many workers had been re-engaged for many seasons without interruption.

On the third issue, the Court held that the union did not incur laches, because there was no work for these seasonal workers during the off season from March to October, the prosecutor's office was seated in Cebu and not in Panay, and a certification election had intervened to absorb the attention of the complainants.

On the fourth issue, the Court held that the claim for backpay should be threshed out in the court below, where the parties must be given the opportunity to submit evidence to prove or disprove the employer's good faith as well as the amounts the petitioners earned or should have earned during their wrongful layoff, such amounts being deductible from the backpay due.

Doctrine

Seasonal workers who are recalled to work year after year during the milling season are regular seasonal employees, not new workers. Their employment relationship is never severed but only suspended during the off season, and they retain a reasonable expectation of continued employment. A closed shop clause in a collective bargaining contract applies only to future or new employees or laborers, and cannot be invoked to exclude seasonal workers who have an existing employment relationship with the employer. The cessation of operations at the end of a season is a temporary and foreseeable suspension, not a definitive termination, and does not by itself sever the labor relationship. Laches does not bar an unfair labor practice complaint where the delay is explained by the absence of work during the off season and by intervening proceedings. Backpay is determined by the industrial court after hearing, with amounts earned elsewhere during the wrongful layoff deductible, and the award is an exercise of the affirmative action required by Section 5, paragraph c, of the Industrial Peace Act.

Disposition

The Supreme Court set aside the resolution under review, directed the court of origin to order the reinstatement of the one hundred one seasonal workers to their former positions, remanded the records for further proceedings on backpay, and denied the company's motion for reconsideration.

Remember This

The single line worth memorizing is that the employment relationship of seasonal workers is never severed but only suspended, so they are not new workers under a closed shop clause. Examiners like to use this case to test the distinction between regular seasonal employees and new employees, and the rule that a closed shop clause cannot be used to defeat the reinstatement of workers who have been re-engaged season after season.